Ebook , by Tom Wainwright
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, by Tom Wainwright
Ebook , by Tom Wainwright
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Product details
File Size: 12073 KB
Print Length: 288 pages
Publisher: PublicAffairs (February 23, 2016)
Publication Date: February 23, 2016
Sold by: Hachette Book Group
Language: English
ASIN: B017QL8XKE
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Amazon Best Sellers Rank:
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“Narconomics†is about how drug cartels are taking pages from the playbooks of big businesses like Walmart and Coca-cola. In cases like diversifying into new markets or deciding to collude with a competitor, this might not seem surprising. However, it may come as a shock to find out about the franchising and CSR (corporate social responsibility) practices of drug cartels. Other than being outside access to the justice system, and thus resorting to violence to achieve what contracts, mediators, and courts would do for other businesses, the drug business it turns out is very much a business.Along the way a secondary story emerges that is just as interesting and even more important. It’s the story of how the drug war makes no sense from the standpoint of economic logic. Destroying fields in South America only makes for poorer farmers because their monopsonistic (i.e. single buyer) market pushes the cost of lost crops back onto them. And because raw product is such a tiny portion of retail price, their destruction has almost no effect on prices at the user end. Furthermore, as more US and European states legalize marijuana, it seems that this will have more of an effect at putting cartels out of business and ending their reign of violence than all the arms shipments and foreign aid for drug enforcement ever had.The book consists of ten chapters, each of which addresses an area of business practices that have been taken up by the drug cartels. Chapter one is about supply chains, and in the case of cocaine there is a rather long one. The raw product is grown in South America and must be infiltrated into the US—usually through Mexico. (For a while there was a prominent Caribbean route, but it was shut down—at least for a while.) This is where we learn about how the cartels adapt to eradicated crops, as well as how the product is marked up at various stages of the operation.Chapter 2 is about the decision to compete versus collude. We mostly read about the competition, because in a lawless market competition equals violence. However, over time cartels have been increasingly willing to agree on distribution of territory. Although, there are also clever means to compete unique to criminal enterprises, such as engaging in violence in someone else’s territory to cause the police to crack down there—thus making it harder for said opposition.Chapter 3 is about human resources, and the different approaches used to handle problems in this domain. In the movies, an drug cartel employee who fouled up always gets a bullet to the brain, but it seems that this isn’t always the case—though it certainly happens. Different countries and regions have differing labor mobility. In some cases, there is no labor mobility. (i.e. if one has a gang’s symbols tattooed all over one’s body, one can’t interview with a rival gang and Aetna sure as hell isn’t going to hire you.)Chapter 4 is about public relations and giving to the public. One doesn’t think about drug lords engaging in CSR, but in some cases they may be more consistent with it than mainstream businesses. The cartels face an ongoing risk of people informing on them, and at least some of those people can do so without their identities becoming known. Violence is often used to solve problems in this domain, but it can’t do it all. That’s why drug lords build churches and schools, and often become beloved in the process.Chapter 5 explores “offshoring†in the drug world. This may seem strange, but drug cartels, too, chase low-cost labor. But it’s not just about lowering costs, it’s also about finding a suitable regulatory environment—which in the cartel’s case means a slack one. An interesting point is made that all the statistics on doing business are still relevant to the drug business, but often in reverse. That is, if Toyota is putting in a plant, it wants a place with low corruption, but if the Sinaloa want to put in a facility--the easier the bribery the better.Chapter 6 describes how franchising has come to be applied to drug cartels—famously the Zetas. The franchisor provides such goods as better weaponry in exchange for a cut of profits. Of course, there’s always a difference in incentives between franchisors and franchisees when it comes to delimiting territory, and this doesn’t always work out as well for drug dealers as it does for McDonald’s franchisees.While the bulk of the book focuses on cocaine and marijuana, Chapter 7 is different in that most of it deals with the wave of synthetic drugs that has popped up. The topic is innovating around regulation, and so it’s certainly apropos to look at these drugs. If you’re not familiar, there are many synthetic drugs that are usually sold as potpourri or the like. Once they’re outlawed, the formula is tweaked a little. In a way, these “legal highs†may be the most dangerous because no one knows what effect they’ll have when they put the out on the street.In chapter 8 we learn that the drug world hasn’t missed the online retail phenomena. Using special web browsers, individuals are able to make transactions that are not so difficult to trace. In an intriguing twist, the online market may foster more trust and higher quality product than the conventional street corner seller ever did.Chapter 9 examines how drug traffickers diversify—most notably into human trafficking. Exploiting their knowledge of how to get things across the border, they become “coyotes.â€The last chapter investigates the effect of legalization, and it focuses heavily upon the effects that Denver’s legalizing marijuana has had in Denver, in the rest of the country, and on the cartels. Wainwright paints a balanced picture that shows that not everything is perfect with legalization. E.g. he presents a couple cases of people who ingested pot-laced food products intended for several servings, and did crazy stuff. However, the bottom line is that legalization (and the regulation and taxation that comes with it) seems to be the way to go if you want to really hurt the cartels and stem the tide of violence, as well as to reduce the number of people showing up at the ER having ingested some substance of unknown chemical composition.There is an extensive conclusion, about the length of one of the chapters that delves into the many ways our approach to eliminating drug use is ill-advised and dangerous. This connects together a number of the key points made throughout the chapter.I found this book fascinating. Wainwright does some excellent investigative reporting—at no minor risk to life and limb. If you’re interested in issues of business and economics, you’ll love this book. If you’re not into business and economics, you’ll find this book to be an intriguing and palatable way to take on those subjects.
I am a conservative dentist, with conservative social views and conservative prescribing practices, who once thought I knew most everything about drug lords, drug addicts, and addictive substances. Then, in October 2014 we found our 24 year old son, dead in our bathroom with a syringe in his hand. I have spent the past 16 months in grief, depression, and wanting to deal with drug dealers in the most violent, painful means imaginable but with no means, plan, or intel to carry this out. The local police have basically have shown zero interest in his case, since they ruled us out as suspects. This book has made me realize that our nation's (world's) drug problem is an economic problem and needs to be addressed in those terms. This extremely well written and researched book gives me a set of arguments to present to our state representatives. An excellent and less emotional review can be read above by Loyd Eskildson
This is a fact based, rational examination of how drug cartels operate and by implication, why they continue to thrive. Although the author speaks in terms of the economics of a drug based business, one is logically lead to the inescapable conclusion that our past and current efforts to eradicate the drug trade are woefully misguided. This book is an enlightening and eye-opening dissection of narco economics. If you've ever wondered why the "War on Drugs" has been lost, you'll find a very entertaining and logical answers in the reading of this book.
This fellow writes like a freshman economics student at one of the ubiquitous socialism -infested junior colleges. He is so proud of having mastered a few economic concepts that his hubris completely prevents him from recognizing the mental gymnastics he must perform in order to reach his utopian solutions. I read about a quarter of the book before I had to put it down due to nausea inspired by his preachy, arrogant and juvenile attitude. If this guy ever grows up and has to deal with a few real world issues, he might write a book worth reading. I regret the time l spent giving this one too many chances.
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